Cancel these crippling PFI hospital contracts and put the ministers who signed them in the dock

It is hard to know what is more terrifying about this morning’s news that South London Healthcare Trust has been placed into administration: That Britain’s hospitals are, effectively, on the brink of bankruptcy or that the news has been greeted with such little surprise.

As anyone who has followed the previous government’s plans to provide public services through Private Finance Initiatives (PFIs) - in which private contractors pay for the building and running hospitals, schools and other services in return for being repaid by the taxpayer over a number of years – will testify that the system was entirely unsustainable.

For those unfamiliar with absurdity of the deals struck with private contractors, let me put them in layman’s terms. More than 900 or so of these schemes have been completed at cost of around £56 bn. However, the amount that we – the taxpayer - will have to repay currently stands at £229 bn.

Absurd: Hospitals locked into long term PFI deals are also being forced to pay absurd charges for basic services

If there was ever a more flagrant example of the previous government’s determination to saddle future generations with unrealistic levels of debt in a cynical attempt to shore up its short term popularity, this was it.

Thanks to the stupidity of the ministers who signed off these arrangements, some hospitals are now paying £60m simply to service the interest charges on their debts, money which could be spent on treating patients. In other words, they are operating under the sort of business model that would make even the most egotistical Premiership Football Chairman blush.

On top of these payments, it was revealed last year that hospitals locked into long term PFI deals were also being forced to pay absurd charges for basic services.

They include: £8,450 to install a dishwasher; £13,704 to install three lights in a garden; £242 to change a padlock on a garden gate; £75 to install an air freshener; £676 to put up four ‘fire assembly signs’ and – best of all - £525 to move three beds.

No doubt people will complain that the private sector was immediately at advantage when negotiations took place, as companies employ streams of legal advisers and financial experts capable of running rings around the government. Maybe so. In which case it is vital that the coalition does everything it can to get these contracts cancelled.

But isn’t it yet more proof that we are governed by a political class whose life experience extends little beyond a University degree in PPE and yet five years later somehow find themselves in charge of the nation’s book keeping?

PFIs are undoubtedly one of the greatest fiascos of our age. It is scandalous that those responsible for them will never live long enough to see the damage it inflicts on the future generations. It jars even further that many of them now currently enjoy lucrative directorships in the private sector.